- Majority, a digital bank aimed at serving newcomers living and working in the US, plans to launch in the country later this year.
- Majority's CEO Magnus Larsson explains how the company has developed a membership-based app made for international communities.
- The digital bank will also open a community space in Houston, where it is headquartered.
Business Insider spoke with Magnus Larsson, CEO of Majority and its Swedish telecom sister company, Rebtel.
Majority is a membership-based banking service. For $5 per month, customers get an FDIC-insured bank account, a Visa prepaid card, access to 50,000 in-network ATMs across the country, remittance services, and international calling. It is partnering with Sutton Bank, a Ohio-based prepaid cards issuer.
Majority will be headquartered in Houston. The bank has been operating there since April on an invite-only beta, and will be rolled out to the public later this year.
Larsson, himself from Sweden, has lived in the US both as a student and as a professional. He said the banking challenges he faced in the US were the foundation of launching Majority.
"It's not that we want to build a bank for the sake of it. We want to solve problems. When you move to a new country, you face these issues and we want to provide the tools to help you succeed," he said.
Legacy remittance player MoneyGram is also looking to offer cheaper cross-border money transfers. The company has partnered with Visa to provide faster, direct-to-debit card payments in the US. The initial roll out targeted US to Mexico remittances. TransferWise, a UK startup that offers international transfers, has also entered the US market offering borderless accounts.
"If you look at the incumbent banks, they offer bank accounts, but the trouble is you don't feel welcome there," Larsson said. "Language is one barrier, it's also cultural reference, it's also that maybe you don't know the lingo, and you don't want to feel stupid, and you don't trust."
Majority plans to staff native language advisors who can help with translations of technical terminology associated with banking, and also make customers feel more welcome. It says it has hired some 200 people to serve as "local ambassadors."
In addition to digital banking services, Majority will open a community space in November. Larsson hopes that the meet-up space will serve several purposes, including networking within the community.
The app has been live as invite-only in the App Store and Google Play Store ever since April, and will be available in all U.S states in a couple of months, the company says.
Majority will offer customers a prepaid Visa debit card. er customers a prepaid Visa debit card. MAJORITY
The digital bank it looking to serve customer who require banking services with high fees like remittances (cross-border money transfers) or cashiers checks.
"The pricing structure is absolutely not suited for migrants," Larsson said. Fees associated with services such as remittances make a traditional retail bank expensive for those customers. The average fee globally for remittances is around 7%.
Majority hopes to reduce the cost of banking for its customers, with all their banking and remittance services covered in the $5 monthly membership fee. The bank won't charge insufficient balance or overdraft fees.